New Year'S Stock Trading Should Go Out Of Four Major Erroneous Zones

In 2011, the Shanghai and Shenzhen stock markets went all the way down. How did the investors take precautions in 2012 and adopt a reasonable way to invest in the stock market?

In recent years, value investing has been upholding in the society, and stock selection is based on fundamental methods, with blind price earnings ratio as the sole buying standard.

In principle, Buffett uses the so-called value investment concept to make money.

However, many small and medium-sized retail investors use stock in value investing, but the effect is still poor.

In fact, whether bull market or bear market, stock selection is no more than two measures: fundamental analysis and technical analysis.

Basic stock selection is value investing, while technology stock selection is trend investment.

The two methods have their advantages and disadvantages. As a successful investor, neither of them can be neglected.

The general principle is to select appropriate trading points by using technical analysis on the basis of fundamental analysis to ensure margin of safety.

Why does the stock price rise? Everyone knows that the key reason is that the stock is bought in large quantities and the stock price can rise.

However, stocks with good fundamentals are not necessarily going to go up.

Therefore, it can be concluded that for small and medium-sized retail investors, it is more likely to grasp some technological means to buy and sell stocks and grasp the odds.

At present, the emotional operation of the stock market is very serious. When the stock price rises, the stock price rises vigorously, and when the share price falls, it cuts the meat quickly. As a result, asset value keeps shrinking in the repeated operation.

The stock market is unpredictable. We should never view the market unilaterally.

Investors should look at the favorable factors of the market under unfavorable circumstances. Under favorable circumstances, we should see the unfavorable factors of the market and be ready to adapt to the ever-changing market.

Frequent short term entry and exit in stock investment, the characteristics of humanity's "new and old" are often exposed.

In the consolidation process, especially when other stocks are rising, they will be fed up with the entire stock market, especially in the fear of falling stock prices.

Although the stock market at the end of 2011 had no improvement in the low price blue chips and the main board in the end of the year, compared with the holdings in the small and medium sized board, gem, ST shares and subject stocks, the loss of concentrated blue chips held at the end of 2011 was relatively small.

The author believes that in the new year, investors should avoid the above four misunderstandings and operate in accordance with the investment rule of "falling for a long time to go up and going deep".